KBRA Assigns Long-Term Rating of AA to State of Connecticut’s $500
Million General Obligation Bonds 2015, Series A & Taxable General
Obligation Bonds 2015, Series A

March 11, 2015 06:16 PM Eastern Daylight Time

NEW YORK--(EON: Enhanced Online News)--Kroll Bond Rating Agency (KBRA) has assigned a long-term rating of AA
with a stable outlook tothe State of Connecticut’s $500 million
General Obligation Bonds (2015 Series A) and Taxable General Obligation
Bonds (2015 Series A). In addition, KBRA affirms the long-term rating of
AA with a stable outlook on the State’s outstanding General Obligation
Bonds, excluding Bonds backed by a letter of credit or liquidity
facility. After issuance of these Bonds, the State’s outstanding general
obligation debt will total approximately $16.5 billion.

Connecticut’s economic recovery is continuing, though at a slower pace
than the New England region and the U.S. as a whole. KBRA views the
State’s financial position as having improved under the current
administration, but projects that budget pressures will continue as long
as economic growth is relatively slow. KBRA views the State’s budget
challenges as mitigated by the State’s demonstrated ability and
willingness to raise revenues and make spending cuts during the fiscal
year to maintain balanced operations. KBRA also views positively the
increase in the funding of the Budget Reserve Fund, which has increased
to $519.2 million or approximately 3.0% of FY 2014 General Fund
expenditures. When the Governor took office in January 2011, his
administration developed a plan for conversion to GAAP-based budgeting
from a modified cash basis and for the funding of the long standing
General Fund deficit. The FY 2014-FY 2015 biennium budget was the
State’s first budget to be developed on a GAAP basis and the State has
implemented a funding plan to fund the GAAP-based General Fund deficit.
The State has continued to fully fund its actually required pension
contributions (ARC) for its State pension programs. KBRA views the
State’s liquidity position as fairly strong.

The rating is based on KBRA’s U.S.
State General Obligation Rating Methodology published on March
28, 2012. The Bonds aregeneral obligations of the State and are
secured by Connecticut’s full faith and credit pledge. All General
Obligation Bond debt service of the State is deemed appropriated without
further action by the State Legislature. Proceeds of the General
Obligation Bonds will be used for various capital projects of the State.

Please use the following links to view KBRA’s full report and tear sheet
on the State:

KBRA is registered with the U.S. Securities and Exchange Commission as a
Nationally Recognized Statistical Rating Organization (NRSRO). In
addition, KBRA is recognized by the National Association of Insurance
Commissioners (NAIC) as a Credit Rating Provider (CRP).

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